Stephen Elop Speaks on Microsoft + Nokia

In a very interesting live Q&A on the former Conversations by Nokia blog today, Microsoft's new executive VP of Devices Stephen Elop offered up a number of interesting comments about the future of Nokia's devices and services businesses within the software giant.

Yes, Microsoft now owns the Lumia, Asha and Nokia phone lines. Yes, Microsoft can use the Nokia name on its hardware products for 10 years. But that Microsoft Mobile name that became public during the sale of Nokia's devices and services businesses is just a legal entity, and not the name, or brand, Microsoft will use for these products going forward.

Elop:

Microsoft Mobile Oy is a legal construct that was created to facilitate the merger. It is not a brand that will be seen by consumers. The Nokia brand is available to Microsoft to use for its mobile phones products for a period of time, but Nokia as a brand will not be used for long going forward for smartphones. Work is underway to select the go forward smartphone brand.

So when will we see the first Microsoft-branded smart phone?

The future is cloudy.

Elop:

Now that we are One company, the marketing and product folks will lay in the plans for the shift to a consistent brand. While we are not ready to share precise details, I can assure you that it will not be the "Nokia Lumia 1020 with Windows Phone on the AT&T LTE Network" ... too many words! That somehow doesn't roll off the tongue...

No one ever called the 1020 by such a name. I find it odd every time someone from Microsoft or Nokia suggests otherwise.

Speed of product releases

One of my big concerns is that Microsoft will slow down the amazing product release pace that Nokia has set over the past year.

Elop:

By combining with MSFT, we will each be able to innovate together in ways that we could not as separate companies. Lots of good things ahead.

He also cites the slowness of the Lumia 1020 camera sensor as an example: Because Nokia had no control over OS capabilities, it couldn't build in a dedicated image processor chip as it had in the Nokia 808 PureView device.

Elop:

We could have gone further [with the Lumia 1020] if the engineering teams between MSFT and Nokia were not in separate companies. As we come together, innovation will be able to move faster.

He was also asked about a 1020 successor this year.

Elop:

I can't comment on specific product plans, [but] it is safe to say that imaging will continue to be an important differentiator for us in the future.

Nokia X

I think the Android- (really AOSP-) based Nokia X is a huge mistake, one that waters down the value proposition of Microsoft's smart phone efforts. But it's not going anywhere, he says.

Elop:

Microsoft acquired the mobile phones business, inclusive of Nokia X, to help connect the next billion people to Microsoft's services. Nokia X uses the MSFT cloud, not Google's. This is a great opportunity to connect new customers to Skype, Outlook.com and Onedrive for the first time. We've already seen tens of thousands of new subscribers on MSFT services.

We are using AOSP to attack a specific market opportunity, but we are being thoughtful to do it in a way that accrues benefit to Microsoft and to Lumia.

This is one of my own questions for the future. He doesn't really answer this one.

Elop:

We have been building a lot of apps that have been specific to Lumia, but now those people and efforts will transfer to Microsoft. We believe that these types of capabilities are critical to differentiation, so you will see these themes continue.

Themes are not apps. I guess it makes sense for Mix Radio capabilities to be merged into Xbox Music and for Nokia Camera capabilities to be merged with the default Camera app in Windows Phone. I guess we'll see.

USA vs. international

This is a theme I see all the time, whether it's people outside the United States criticizing Microsoft for releasing first (or only) in this country, or my own coverage which is by necessity US-centric. More specifically, someone asked about the Swype-like keyboard in Windows Phone 8.1 being made available in more languages.

Elop:

I can't announce specific timing for languages, but you will see this and other capabilities like Cortana pushed out widely.

Discuss this Article 24

Quite irritated that the Nokia X isn't being canned. The best selling Windows Phone on the planet is already at that price point.

What's the point? Why offer a phone with a neutered Microsoft services experience and a neutered 'advantage' of being based on Android (in name only) when you already have one that offers the full experience at the same price?

This is an interesting test I think. There are people who don't use Windows Phone because its "Windows" Phone. I think they're testing to see if it uses Android if it will gain popularity with people who have an aversion to Windows. Not sure if it'll work but I've seen stranger things.

Also if they can get all the "non Google" Android apps to work the X series of phones then they could have access to over 1 million apps and we know how important the number of apps that is accessible on a phone is important to people.

I would prefer to just have Windows Phone and see growth in it...especially in the US. We'll have to see what happens.

Because the consumers do not want to buy Windows-branded phones. These are consumeroriented products, and Windows, with all that MSF have been doing since Win 95, has become the ultimate consumer anti-brand. A sudden flurry of good products -- the first ever for Windows -- is not going to change that monopoly-brand perception. Hence Android.

It took me a while to understand this one myself. It really has little to do with cost, which the Nokia X proves. This is about ecosystem and apps.

In order to be successful in certain markets you need apps and Windows phone just doesn't have those apps or the market share to get them. For example: Windows phone in China is less than 1% share. There is no hope to attract dev interest with such little market share. Here it is better to use Android with MS services than WP which has no chance in the immediate future. If you don't you could seed the entire market to Google and loose out on everything! Same with Japan and Russia. It's not cost keeping people off windows phone, it's ecosystem.

It's better to offer something to customers and build the brand than to just slowly disappear. I doubt we'll see Nokia X in the States or Italy where WP is nearing 20% share but it does make sense in these other areas where WP hasn't taken off.

The Nokia X, is a reflection of reality. Even though some of appreciate the superiority of Windows Phone, over Android. The fact is that Apps count is more important, and Google owns the ecosystem at the moment.

Getting an Android platform based phone to connect into MS services is one last hope to get those users into the MS ecosystem, and then possibly move onto full Windows Phone.

Dropping Nokia X phones would be a stupid move. Show how strong Windows Phone is by selling alongside Nokia X.

The Nokia X, is a reflection of reality. Even though some of appreciate the superiority of Windows Phone, over Android. The fact is that Apps count is more important, and Google owns the ecosystem at the moment.

Getting an Android platform based phone to connect into MS services is one last hope to get those users into the MS ecosystem, and then possibly move onto full Windows Phone.

Dropping Nokia X phones would be a stupid move. Show how strong Windows Phone is by selling alongside Nokia X.

"More specifically, someone asked about the Swype-like keyboard in Windows Phone 8.1 being made available in more languages, as its US-English only right now."
I use this keyboard in French and it works really well. Autofills most accents and everything too, which is an improvement over the keyboard in Windows Phone 8.0. I don't know if this is affected by the fact that I'm using a 720, which in my case comes preloaded with English, French and three other keyboards I'm not familiar with.

Well, I really can't speak for other languages, but I've been able to use the word flow keyboard on Spanish since day one.
What's really off putting is that the rom my 920 came with doesn't have the en-US language installed, so I am unable to try Cortana yet. That is a shame, I'd very much like to try the interface Cortana has and make her interact with my apps.

I'm using both a US-English keyboard and a Dutch one, swyping work on both of them. My phone's region is set to the U.S. though. Speaking of international shenanigans, I wonder if MS will end up calling their phones Microsoft Lumia in the U.S. and Nokia Lumia in other territories, at least for the time being.

I use swype keyboard in spanish (though my phone is set to english and I switch between ENG and ESP depending on who I am texting or where I am writing) It works perfect in spanish and english of course when set to the right language.

Elop needs to simplify the product line more than the naming. For instance, the 500, 600 and 700 series can be merged into one phone. Similarly, the 800 and 900 can be one. The 1000 series can be a specialized line focusing on imaging alone and the 1500 series on tablets (which they already do).

Regarding the naming, just looking at the way these devices have been named, it's hard to tell what the differences between any of these series are.

Some of that is dictated by carriers. While Verizon and AT&T my eventually carry what on a spec sheet is essentially the same handset, they will be numbered quite differently. In many ways, the 900 and the 920 are not at all related and completely separated by OS. The 720 was a bargain set I was attracted to and now it is gone. The numbering critera have as much to do with the carriers as the OEM.

I agree with Microsoft to keep the Nokia X phones. Not that I would buy it, because I think the Windowsphone platform is far superior. But Nokia X is a means to an end, much like Windowsphone and Windows are becoming; to get people to buy Microsoft 'Devices' and use their 'Services'.
It's the new reality. And with the Asha line, they can even undercut the price point of the Lumia 520 and still push MS services (the yield on these devices is basically zero)

There's a lot of weird stuff about this acquisition: Nokia X, the development of a new camera app by Microsoft for 8.1 as opposed to waiting and bundling Nokia Camera (or not redesigning and waiting for 8.2 to do this), that response about the Nokia specific apps, etc. Just strange. I'm going to go ahead and say that this stuff will never fully be resolved... That's just the Microsoft way.

As long as Nokia can continue pumping out great phones at the same rate as today, I'll be happy.

I just don't see a future for Windows Phone. With this merger Nokia will completely die. As soon as 'people' find out that Nokia is associated with Microsoft, it will be an end of the game. People simply won't buy it no matter what Microsoft puts there even if it comes with 'free pizza'. It is just reality...

I would like to add this as well. I am saying that people don't want 'Windows' name associated with anything. It is one of the reasons why Windows Phone has terrible sale. Let's face it...I don't know a single person who owns it except myself. 3% of market share is joke. Microsoft has a great opportunity to ditch name Windows when they originally created Windows Phone 7 but they did not. It will be proven as one of the worst mistakes MS did. History books will write about all this in years to come.

From an international perspective it is noticeable that while the lowest market share of Windowsphone is in the USA it is markets where Nokia is a strong brand where Windowsphone is hitting dual digit market share.

How has Microsoft responded to this. Mostly by launching apps and services first in the USA and much later (if at all) in other markets. Thus making sure that those most loyal to the Nokia brand are treated as second class consumers.

This generates a lot of frustration amongst international customers when reading tech blogs on the US only features. If Microsoft are now in full control there will be almost no pressure to consider non-US markets. One of the Nokia brand's great strengths is it's international perspective. I wonder how long this will survive with MS in charge.

It seem that MS's currently is about reaching the "threshold" with all things Windows. The statement "One experience. On every device. For everything in your life." see: http://www.bing.com/videos/search?q=One+experience.+On+every+device.+For... is just exactly what is needed but more than that, MS needs to bundle and therein leverage their 1.5 billion users to use Nokia and Nokia X phones as reward for Windows PC brand loyalty.

Currently they don't do that! They may have to grit their teeth and get creative! Once that is done they can start to build beyond the MS loyal.

Apple has good traction in the phone/tablet space (with the iProducts) but not so much in the Desktop/computer/laptops space because Windows is more ubiquitous.

Google also is doing even better in the phone/tablet space (thanks mainly to Samsung) but even worse in the computer/laptop space because of unit cost. Both are successful because of marketing and the excellent app ecosystem. I mean everyone knows the words "iPad" and iPhone - very few know the words Lumia and Surface. Even words like Samsung, Galaxy and Android are well known now.

They don't seem to be effectively be acting on that a large percentage of the people buying Apple and Google devices own Windows PC's!

It would seem a pragmatic thing to do for MS is build on the "One" concept and get sleeping Windows users to see the advantage of having the same experience across all devices but do what the other two ecosystems can't do and that is to offer incentives (because of PC ownership) - hence bundling phones, Surface (and Surface Mini?) and even Nokia (Lumia 2025 and 8" slate TBA).

MS is the only company that can do that because of the existing PC and Windows tight(ish) OS integration across all their devices. Problem seems to be in execution - so it remains to be seen if they would ever move at "the speed of a startled prawn" but I am sure we the Microsofties out there would love to see it!!

MS could simply send an email invitation for every Windows PC user with an offer to bundle a Lumia phone and/or Surface or Lumia 2025 to call a hotline and also have the same things in place with the Telcos and their (not so global) stores and pop up stores.

This could be done by providing the product ID found in the system setting of the PC owners or use some type of Windows Product Key finder so that it is all above board.

The offer has to be so good that people wont be interested in Apple and Google devices and therein lies the challenge...

I am not really a fan of Microsoft going down the road to be like Apple. Here is my rationale, Microsoft was never struggling to where they needed to emulate how Apple operates. Apple back then was in terrible trouble, and Steve Jobs got Apple pointed in the right direction. On the other hand, Microsoft was doing quite fine, and I am unsure if this Microsoft to Apple-esque transformation is a truly good thing.

International Releases: It is not just languages. Our Windows Phones support dozens of languages and regions. It is services. Why can't Xbox Music/Video, etc. be more global? My phone was first set to a Japanese ID. That completely limited what could be shown purchased, rented, downloaded.

I understand that the stores need to be localized. I get that movies in one service will not be universally available on the same time frame. But Windows has never been a US-only OS. It is the most used OS anywhere. So why are services not also shared. Zune was a perfect example. When I bought my Zune, I had to use a US account to have access to music. When Zune finally arrived in Japan, it was video only. Head slap there. We all know this battle has been fought before, with far less marketshare in the beginning by iTunes

I guess the time frame Microsoft and Nokia agreed on for the smart phone branding transition was never disclosed, though one (One!) would expect this to not last very long with Nokia regaining rights to its brand for smart phones at the end of 2015.

Also, how many devices in the pipeline will still be launched (and hence, later need to be updated with fresh branding) using Nokia? This should really be beyond the 'selecting a brand' phase 7 months after the acquisition was announced, IMHO.

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